Asarco reaches settlement with Augusta calling for annual production payments to be made to Asarco

By Jennifer Lanning Drey

Portland, Ore., Jan. 16 - Asarco LLC reached a settlement agreement with Augusta Resource Corp. resolving a lawsuit filed against Augusta for return of the Rosemont property in Arizona, according to an Augusta news release.

Under the settlement, Asarco will receive $250,000 in cash from Augusta upon approval of the settlement.

Additionally, once commercial mine operations commence at the Rosemont property, Augusta will pay Asarco annual production payments over the course of eight years.

Augusta has the right of a pre-production, pre-payment option for the annual payments at the net present value of the aggregate annual payments, using an agreed 18% discount rate.

If Augusta elected the pre-payment option in 2009, it would pay Asarco $2.6 million, according to the release.

Augusta acquired the Rosemont property in 2006 from a real-estate development company that purchased the property from Asarco in 2004.

The settlement requires approval from the U.S. Bankruptcy Court for the Southern District of Texas.

Asarco, a Tucson, Ariz., mining company, filed for bankruptcy on Aug. 9, 2005. Its Chapter 11 case number is 05-21207.

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